Real Estate Fraud | 5 Scams To Avoid!


Real estate fraud is not okay! Let’s talk
about five scams to avoid and how to avoid them. Hey everyone! Welcome back to
our Channel, I’m Lindsay with the Wise Move AZ Team at Realty ONE Group. If you
want to stay up to date on all things Anthem and real estate then you need to
hit that subscribe button! Pro Tip: You’re also going to want to hit the
little bell icon, so that you’re the first to know when our new videos are
posted every single Thursday! Okay, so we’re releasing this video on
Halloween and Carolynn and I put our heads together and thought what’s the
spookiest thing we could talk about on Halloween?? …Real estate fraud! As your Anthem, Arizona REALTORS® we take our job of protecting our clients and their
hard-earned money very seriously. So, today we’re going to share five scary
scams that you could fall victim to, and how to make sure that you don’t! Sound
good? Before we start I want to give a little disclaimer. We’re going to be
looking at five different real estate related scams to watch out for. There are
way more than five scams out there. Our best advice to you is to trust your
instincts. If something doesn’t feel right, ask more questions. Hopefully
between your REALTOR®, Lender and Escrow Officer, you have a team of dedicated
professionals that you can trust to protect you.
Let’s be honest, we are bombarded by scam artists daily. They call, they email, they
text, and they skim your card at the gas station. Next thing you know, we’ll
probably be dealing with scam drones showing up at our front door. These
fraudsters are cunning, creative, and non-discriminating. They don’t care how
old you are, they don’t care what you look like, they don’t care about YOU! But
guess what? We do! So, let’s take a closer look at real estate fraud. First things
first, what is real estate fraud? It’s when a person or group of people make
misrepresentations and/or use false information to take advantage of another
person, using a real estate transaction as the means of committing the
fraud. Here are five common real estate scams to keep on your radar if you’re buying,
selling, renting, or mortgaging a home. #1: Escrow Wire Fraud. When buying
a home in Arizona it’s not uncommon for the buyer to wire the earnest money
deposit or the cash to close to the escrow company. Here’s how wire fraud
works; a person claiming to be from the escrow company calls, emails, or texts you
with instructions on where to send your money. Behind the scenes the fraudster
may have set up fake email addresses, websites, phone numbers, banking details,
and anything else they need to appear legitimate. If you’re buying a home, you’ve probably been expecting this call. So, you do as you’re told and wire the
funds in accordance with the instructions provided. Before you even
realize you’ve been scammed, the fraudsters have withdrawn your money
and are nowhere to be found! So, how do you protect yourself from this one? The
easiest way is to use another method to transfer funds like a cashier’s check.
Talk to your REALTOR® and Escrow Officer about your options. If you have to wire
money don’t worry. Before you send any money call your
Escrow Officer to confirm that the wire instructions are correct. #2: Mortgage Fraud for Profit. This one can take many different forms and it can get
a bit technical, so let me explain just one way in which an unsuspecting buyer
could fall victim to this fraud. Let’s say that you’re looking to buy into a
neighborhood out of state and a friend that already lives there, calls you and
tells you that their neighbor is selling. The owner says he’ll sell the home too you at a great price because you’re doing the transaction “off the market” and he
doesn’t have to pay any REALTOR® commissions. He may even show you that he’s taking the commission amounts off the
price… SCORE!! You go and see the house, and it is exactly what you wanted! YAY!
Then the Seller tells you that he can put you in touch with a great lender
that offers awesome rates. How nice is this guy?!? You’re new to the area and
wouldn’t have known who to call anyways. You talk to the lender and they’re happy
to help. The transaction moves along smoothly, you close on the house of your
dreams, and everything is good, right?!? Wrong! Let me tell you what’s happening
from the scammers perspective; in this case the fraudster is the seller.
Unbeknownst to you, they’ve inflated the price of the house.
That great deal you’re getting is actually $60,000 above market value! But
how would you know? Houses here are way less expensive than where you’re from! In
the background the seller has been working with an unscrupulous appraiser
and may even be talking to the lender directly. In the end you’ve paid way too
much for the home and the Seller is somewhere on a beach with your money.
Ouch! So, how do you prevent this? Well, the easiest way is to find a REALTOR® that
you trust to protect you and your hard-earned dollars. This means talking
to friends and family and doing some research online. Then ask your REALTOR®
what they do to ensure that you’re paying a fair price for the home. They’ll
be able to take you through their process for running comps and anything
else they do. A good REALTOR® thrives on getting the best possible deal for their
clients. The other thing I would say, and you’ve probably heard it a million times,
but if it sounds too good to be true, it probably is! If you’re thinking this
story sounds oddly specific, Lindsay, it is! Carolynn was able to save some Buyers
from this very situation a few years ago. The buyers were paying cash, so the fraud
didn’t even rely on the Seller colluding with an appraiser or a lender… YIKES!
#3: Mortgage Fraud for Housing. This fraud generally relies on Buyers
using inaccurate or misleading information about their
financial backgrounds. It often, but not always, involves identity theft. If you’re
thinking about buying a home and need a loan, know that a good lender is going to
fully investigate your financial situation. Don’t lie! Chances are you’ll
get caught. On the flip side of this, it’s always important to keep a close eye on
your credit score and finances to ensure that you haven’t been the unsuspecting
victim of identity theft. If something doesn’t look right, contact your bank
immediately. #4: Rental Scams. This is another one that can take many forms
and sadly it’s frighteningly common. With this type of fraud the scammer
posts a property for rent, usually on social media. They often go as
far as posting real or fictitious photos of the property. The catch is that the
fraudster has no interest in the home, and no right to rent it out. When a
potential renter reaches out, the fraudster asks for an upfront payment to let you
see the home and to hold as a deposit, usually promising to return it if you
decide not to rent. Your payment is quick cash in the fraudsters pocket, and
when you show up to see the home they’re nowhere to be found.
How do you protect yourself? Do everything you can to ensure that you’re
dealing with a legitimate REALTOR®, Property Manager, or the home owner
directly. This will require you to do some research online. Additionally, you
shouldn’t need to put down a deposit just to see the home. #5: Foreclosure Rescue Fraud. Okay, all of these frauds make me mad, but this
one particularly makes my blood boil. It’s really taking advantage of people
in a tough spot. Foreclosure rescue fraud involves fraudsters who promise to help
borrowers who are underwater on their mortgage. They promise to reduce a home
owner’s mortgage payments for a large upfront fee. Once the fee is paid, the
fraudster disappears leaving the homeowner in worse financial shape
than before. First off, if you’re in a position where you’re struggling with
your mortgage, I am so sorry. Secondly, to prevent yourself from
falling prey to this fraud, reach out to a lender that you trust to discuss your
options. You can ask family and friends for recommendations or do research online. There are also HUD accredited housing
counselors that can work with you and keep you safe. So, there you have it!
Pretty scary, right?!? I hope that this video will help you to identify some of
the red flags when it comes to real estate fraud. If you’ve heard of or
experienced another type of real estate fraud, drop it in the comments below so
that others can learn from it too. If you enjoyed this video, let me know by
hitting that like button, subscribing to our Channel, and sharing this video with
your friends! See YOU next Thursday!

19 comments

  • Have you or anyone you know been the victim of a scam? We work hard to protect our loved ones and clients from fraud, but it is no easy task! What do you do to protect yourself?

  • Susan Hicks Thetford

    It is so scary what can go wrong because of creepy people$! Great tips Lindsey

  • Horizon Real Estate & Probate and Trust Help

    Great video. So many ways for people to be scammed these days. Thanks for the share.

  • John Cunningham eXp Realty

    Isn't it crazy that we all have to watch out for this stuff?! Thanks for shining the light on this and making it just a little tougher to take advantage of someone.

  • Albert & Lynn Alvarez

    Thanks for giving these great tips to avoid being a victim of these criminals.

  • Mike Brown - Broker

    As an old Mortgage Broker, I have seen some of the worst scams out there. All great tips Lindsey.

  • Everything Edmonton

    This is a great video! All those snowbirds buying with cash need to watch this one!!

  • Joan Bang Real Estate Group

    These are scary frauds! Our buyer clients experienced the wire frauds before. Calling the escrow officer beforehand is a must.

  • So many scams out there now, thank you for sharing!

  • Thanks for sharing this video. Love the color of your top! You look great. 🙂

  • Hollywood FL Realtor Kate Smith

    Very interesting! Most of the attorneys I work with here in SE Florida, caution against cashier's checks and encourage wiring funds.

  • Moving to Murrieta by Jessica Genung

    Thanks for looking out and sharing this great info! Wire fraud is especially concerning out here. It's a real thing and very scary!

  • Oh! I have heard of a few close calls! Thank goodness I've never heard of someone losing money, but fraud has been attempted via email. EEK!

  • Thanks for sharing Lindsay. I learned a few new scams to look out for. A coworker in my old brokerage had a client’s wire transfer get scammed. It was about $120k

  • Patrick Fields, Edmonton Real Estate Guy

    It is horrible that people even think of doing things like these… Thanks for the extra awareness!

  • Such great tips, on such an important topic! Buyers & sellers need to be aware and vigilant. Thank you so much for sharing!

  • Ugh! So many scams to watch out for. Thank you for explaining these 5 real estate scams and how to protect yourself. It's easy to see how someone could lose A LOT of money and end up with nothing but heart break.

  • this is something we talk about all the time – it's great to have more detailed info to give – thank you!

  • Amy Hayslett Realtor

    I just had a client send me a Craigslist ad for my neighbors home and his home is not on the market.

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